The dark art of viability

How developers dodge affordable housing obligations

Granting developers planning permission can increase the value of a given plot of land exponentially. In London this can result in windfalls to developers of tens, sometimes hundreds of millions of pounds. Affordable housing obligations are a way of capturing some of that value while ensuring that developments make some provision for local housing need.

So why is it that every politician promises us more affordable housing and we end up getting less and less? The answer is viability assessments; the dark art of tweeking the numbers to make developments look less viable than they really are. For example, this scheme at Elephant & Castle returned four times more profit than developer Lendlease declared in its viability assessment. The 35% Campaign and Woolfe Vision have produced this short film explaining the basics of how developers cook the books and how they get away with it.

We have been very active in campaigning for transparency in viability testing and against the loss of affordable housing it always entails. Viability assessments are a key factor in any planning application as they not only determine the level of affordable housing but also justify other departures from policy requirements, i.e. restrictions on car parking and contributions to public infrastructure.

Following our success in obtaining the viability assessment for the Heygate redevelopment, we published our Viability for Dummies hanbook, explaining how to obtain viability assessments via FOI/EIR regulations. Subsequent media pressure has resulted in three London boroughs and the GLA introducing policies to make viability testing more transparent (Islington, Greenwich and Southwark).